The Guinean Railway Talks Are On The Verge Of A Deal, And The Simandou Iron Ore Breakthrough Is Imminent

In an interview after announcing first-half results on Wednesday, Jakob Stausholm, chief executive of Rio Tinto, said the group said it was close to a breakthrough on the Simandou deal after a row over rail.

The development of the huge Simandou iron ore project in Guinea has been blocked for years by a series of disputes over the project's ownership and infrastructure, as well as political changes in Guinea.

Stausholm said talks between investors and the Guinean government to build a railway to export ore could be close to a deal.

"We could be very close," he said. "It could happen very soon."

Simandou is divided into four blocks, of which Blocks 1 and 2 are controlled by the Simandou Winning Consortium (WCS) and backed by Chinese and Singaporean companies, while Rio Tinto Group and Chinalco own blocks 3 and 4.

The Simandou project provides Rio Tinto Group, the world's largest iron ore producer, with a potentially huge new source of supply, while China sees the project as key to easing its steel industry's dependence on Australian production.

China, the world's largest steel producer, recently launched one of the biggest restructures of the global iron ore market in more than a decade, setting up a new state-owned group that aims to become a hub for huge overseas mining investments and buy steelmaking ingredients from international suppliers.

Earlier this year, two Simandou consortiums struck a deal to jointly build a 650km (404-mile) railway linking the mine to a planned port. As part of the deal, the government received a 15% infrastructure stake, matching its ownership stake in the mine.

Yet debate over how to pay for the line has dragged on.

Stausholm said Rio's group negotiating team, led by executive Bold Baatar, was in the capital Conakry, where talks with various parties were ongoing. He declined to comment on the specifics of the discussions.

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The talks have centred on whether the government should pay its share of the cost of building railways and ports, according to people familiar with the matter.

里约热内卢(Rio Tinto)组和consortiu赢得联盟m have offered an interest-free loan to cover the government's costs, while the government is seeking to hold its stake for free, according to people familiar with the matter.

Rio Tinto Group had been willing to renegotiate this point, but the winning consortium's position was less clear, people familiar with the matter said.

Spokesmen for the Winning Alliance consortium and Guinea did not immediately respond to requests for comment.

Earlier estimates had suggested the railway could cost more than $10bn, although an updated cost forecast is not expected until an agreement is reached.

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几内亚政府试图迫使广告样稿anies to act. Earlier this month, the government ordered both consortia to cease their activities in the country, citing their failure to reach a partnership agreement.

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Mining Minister Moussa Magassouba also said the country was ready to develop the project without the two consortia if no agreement could be reached.

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"I'm not too worried," Stausholm said. I would be more concerned if we could not sign an agreement in the foreseeable future."